Slate Money: The Helipad Edition

Date: November 17, 2018
Host: Felix Salmon with Emily Peck and Anna (Anna Shymansky)
Main Theme:
This episode dives into three major business and finance stories—the Amazon HQ2 sweepstakes and fallout, the continuing Brexit saga and its intractable challenges, and the remarkable comeback of hedge fund manager Steve Cohen after scandal. The hosts deliver sharp, often contrarian takes on the intersection of corporate influence, local economies, political incompetence, and financial market dynamics.

Amazon HQ2: The Helipad Debacle

[00:00–16:53]

Key Discussion Points:

• Amazon’s HQ2 Contest:

  • Amazon solicited bids from 238 cities for its new headquarters, only to split HQ2 between Long Island City (Queens, NY) and Arlington, VA—largely seen as inevitable, "obvious" choices.
  • Both locations included a requirement to build a helipad, seen as a perk for Jeff Bezos.

• Backlash in New York:

  • Many New Yorkers are upset, especially since the city promised Amazon close to $2 billion in tax breaks and incentives. There’s a widespread feeling that New York prostituted itself for a deal Amazon was always likely to choose.
  • The site for HQ2 was previously earmarked for much-needed housing, now diverted to a corporate campus.

• Debate: Job Creation vs. Inequality and Gentrification

  • Anna (03:15): "I think it's hard for me to understand why bringing a tremendous number of very high paying jobs...is a bad thing for the city."
    Anna argues that such deals help spur investment in infrastructure and education, and city competition can help secondary metros understand what investments they need.
  • Felix (07:54): "They realized that they wanted to be in the middle of everything and there's no amount of money that can make up for that."
    He contends that superstar cities like New York and San Francisco are always going to win these races, regardless of incentives.
  • Emily (11:50): Raises concerns about inequality, displacement, and the limited direct benefit for local public housing residents: "The people who live in the housing project maybe aren't gonna get the hundred thousand dollar jobs and aren't gonna benefit from the influx."

• Symbolic Outrage: Helipad Exception

  • NYC banned private helipads after 9/11, but Bezos gets an exception as part of this deal—a focus of criticism.

Notable Quotes:

• Felix: "This is a big deal in New York City because private helicopter trips and helipads have actually been banned since 9/11. He's carved out like an exception to the rule for himself." (02:33)
• Anna: "I find it odd that when we have a company coming in, bringing exactly the type of jobs that we say we want...we then push back and say, well, but this isn't going to be good for everyone." (16:53)

Memorable Moments:

• Emily’s personal account of Williamsburg’s gentrification, offering a living snapshot of the complexities of neighborhood change: "We lost the diner, was replaced by like six coffee shops...the fruit stand...replaced by a juice store." (14:25)
• Consensus that Amazon will have less outsized power in New York or Washington than in Seattle, where it has been able to sway even homelessness policy.

Brexit: 535 Pages, Zero Fans

[16:53–27:40]

Key Discussion Points:

• The Unpopular Brexit Deal:

  • The long-awaited 535-page draft agreement revealed a "ultra, ultra soft Brexit" keeping the UK under EU law for the foreseeable future—pleasing no one, including its own chief negotiator, Dominic Raab, who immediately resigned.
  • Felix (17:50): "It is a shit show...as bad as you can imagine."

• Irish Border—The Insoluble Problem:

  • The seamless border between Northern Ireland (UK) and the Republic of Ireland (EU) is essential for peace and daily life, but makes border controls and Brexit incompatible. Any hard border (either on the island or in the Irish Sea) is politically toxic.

• Possible Paths Forward (None Look Good):

  • The deal is better than no deal (hard Brexit), but every political scenario—from last-minute compromise to a second referendum or simply crashing out—seems currently plausible, with increasing likelihood of disaster.

Notable Quotes:

• Felix: "This agreement...is none of those 15 things [leave voters voted for]. No one was voting for this." (27:31)
• Anna: "There's no possible option here that is better than, than just remaining as, you know, a part of the EU." (21:11)
• Emily (on Theresa May): "Props to Theresa May for sort of. For a. Not quitting like that other guy. Like, at least Theresa May is not a quitter." (24:13)

Memorable Moments:

• The hosts' utter disbelief at the UK's political leadership, with Emily declaring, "Just terrible. Just shows you the quality of leadership over there is bad." (17:46)
• Felix’s summary of Brexit choices: "You can have this deal, you can have no deal, or you can have no Brexit." (22:23)
• Debate over feasibility and politics of a second referendum, with Anna noting how it could be "politically really hard for a lot of MPs." (26:19)

Steve Cohen & The Hedge Fund Redemption

[27:40–39:02]

Key Discussion Points:

• Steve Cohen’s Return:

  • After insider trading scandals forced his firm SAC Capital to return outside money, pay massive fines, and take only internal capital, Cohen is back—having raised $5 billion for his new fund, Point72, even with steep 2.75%/30% fees.
  • Cohen claims the fundraising was effortless, but Anna is skeptical: "That didn't happen. I'm sorry. That didn't happen 100%." (29:48)

• Motivation: Money, Winning, or Both?

  • Discussion centers on why billionaires keep chasing more—status, competitive drive, and demonstrating trading supremacy, not just wealth.
  • Anna: "To me, it's not that they want to be richer. It's about winning." (30:43)

• Questionable Value for Investors:

  • Despite his track record, recent returns have been middling ("only 10% last year," per Emily [31:56]) with heavy leverage, and debate over who is risking capital with Cohen given his checkered past.

• Is Ruthlessness a Selling Point?

  • Some investors are drawn to "bad boys" of finance (citing research highlighted by Matt Levine), but Anna doubts outright criminality is attractive versus simple ruthlessness: "I will say I do think there's a difference between ruthless and corrupt." (35:32)

• Insider Trading Debate:

  • Felix: "It is a victimless crime." (37:25)
  • Emily challenges this, pointing to the fallout for whistleblowers and the importance of fair capital markets.
  • Anna agrees laws are needed: "I do think there is something to having capital markets that people have some sense that there's are some rules that people are following." (38:17)

Notable Quotes:

• Emily (on Cohen's terms): "He charges 2.75 and 30. ... Which is pretty audacious." (31:56)
• Felix: "The point is that like if you're painting him as the victim, then you know, the, the criminal and the victim are the same person." (38:01)

Lightning Round: The Numbers

[40:03–43:14]

• Felix: 1.55% – The coupon on Kazakhstan’s new euro-denominated bond, already oversubscribed.

  • "Don't go out and buy the Kazakhstan euro bond. Like, no good can come of it." (41:11)

• Anna: $19.82 – The price of Monopoly's “Millennial Edition,” which features no real estate (as millennials "can’t afford it"), and is based on gaining "experiences" instead.

  • "At first...I was like, oh this is kind of horrible. But then...it's so horrible it's kind of awesome." (41:44)

• Emily: 6 – The number of NBA games Dwyane Wade will miss for paternity leave—remarkable because paternity leave is rare in pro sports and signals progress.

  • "We want more men to take paternity leave because it sort of evens the playing field for women, too." (43:07)

Conclusion

• Tone:
  Witty, irreverent, cynical, but informed—with hosts challenging one another and offering nuanced perspectives on major economic, political, and market news.

• Memorable Final Note:
  Felix previews the next episode’s deep dive into sovereign debt with Lee Buchheit, promising an even nerdier discussion.

For Listeners Who Missed the Episode:

This is a packed episode with trenchant debate on the real impacts of corporate subsidies, the political gridlock of Brexit, and the allure and ethical murkiness of high finance. Snark, sharp data, and on-the-scene reporting combine for essential context on why New Yorkers are infuriated over Amazon’s helipad, why Brexit may hinge on Irish geography, and why Steve Cohen still gets billions thrown at him—even after scandal.

Suggested Segments by Timestamps:

• Amazon HQ2 – [00:00–16:53]
• Brexit – [16:53–27:40]
• Steve Cohen – [27:40–39:02]
• Numbers round – [40:03–43:14]

Selected Quotes to Remember:

• Anna (on NYC’s deal with Amazon): "I find it odd that when we have a company coming in, bringing exactly the type of jobs that we say we want...we then push back and say, well, but this isn't going to be good for everyone." (16:53)
• Felix (on Brexit): "This agreement...is none of those 15 things [leave voters voted for]. No one was voting for this." (27:31)
• Anna (on Steve Cohen): "To me, it's not that they want to be richer. It's about winning." (30:43)